Talking About Your Competitor's Products? Don't Cross the Line into Defamation!

Client AlertJune 8, 2017

Ohio Court Upholds $49 Million Verdict for Defamation of Competitor’s Products
A recent Ohio court of appeals decision provides a cautionary tale on the dangers of making public statements about a competitor’s products. The line between fact and opinion can be a thin one, and ending up on the wrong side can have significant repercussions. An inaccurate statement about a competitor’s products, even if it couched as an opinion, can support a defamation claim if the statement is verifiably untrue.

The case – ClarkWestern Dietrich Building Systems v. Certified Steel Stud Association – resulted in a $43 million verdict against a trade association that had published the defamatory statements. The association published a series of statements about a coating product that had been newly-developed by a non-member manufacturer and made its steel framing products cheaper to manufacture than those of the association’s members. The publication, while called “CSSA Opinion,” stated that the new product did not comply with industry standards and that contractors using the product were subjecting themselves to liability, and criticized other aspects of the product. The trial court refused to dismiss the defamation claims asserted by the trade association, and the jury returned a $49 million verdict, $43 million of which was apportioned to the association. The court of appeals upheld the verdict, finding that the statements were sufficiently precise and verifiable to support a defamation claim if untrue, even though the association had promoted the publication as its “opinion.” (Read the full opinion)

This case underscores the importance of using caution in sales and marketing materials that comment on the products of a competitor. For more information on how this may impact your business, please contact Frantz Ward attorney Christopher Koehler or another member of our Litigation Group.